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G20 Leaders Pledge to Slash Deficits

Heads of states and governments and other dignitaries pose for a family picture during the G20 summit at the convention center in Toronto,  27 Jun 2010.
Heads of states and governments and other dignitaries pose for a family picture during the G20 summit at the convention center in Toronto, 27 Jun 2010.
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Leaders of major industrialized and developing nations have returned to their home countries, after endorsing a plan that calls for the world's richest nations to cut deficits in half within three years.

Canadian Prime Minister Stephen Harper announced the plan at the end of the G20 summit in Toronto.

Countries will be allowed to slash deficits at their own pace, depending on their respective economic situations.

U.S. President Barack Obama endorsed the goal of cutting the U.S. deficit in half by 2013, but voiced concern that reducing spending too drastically could stifle economic growth.  

The G20 leaders also agreed on a non-binding pledge to balance budgets by 2016.

European officials are hoping to restore market confidence in the euro currency.

In a closing statement, the G20 leaders cautioned that serious challenges remain in the world's economic recovery.  They said growth is returning, but that recovery is "uneven and fragile," and unemployment in many countries remains at unacceptable levels.

They said to sustain recovery, nations must follow existing stimulus plans and work to create conditions for robust private demand.

President Obama also said he expected China to take seriously its recent pledge to let its currency, the yuan, trade more freely against the U.S. dollar.  He said China's two-year-old practice of undervaluing the yuan had given Beijing a major trading advantage in the global market.

The G20 includes the world's major industrial countries -- the United States, Japan, Germany, France, Britain, Canada, Italy and Russia -- plus major developing nations such as China, India, Brazil, and South Korea.

Some information for this report was provided by AP, AFP and Reuters.

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